CNG Price Hike: Delhi, Neighbouring Cities to See Rs 3.89 Per Kg Increase From Saturday

CNG prices in Delhi and neighbouring cities will increase by Rs 3.89 per kg from 6 am on Saturday, Indraprastha Gas Ltd (IGL) said on Friday. According to an official release, IGL said that a major share of the input gas required for the production of CNG is sourced through imported LNG. Prices of imported LNG in the spot market have increased significantly since the start of the West Asia crisis.

“Given the continuing rise in international LNG prices, the impact of which has started becoming more significant, it is now imperative to revise the rate of CNG price by Rs 3.89 per kg in order to partially meet the increase in the input gas cost,” IGL said, adding that the revision will take effect from 6 am on Saturday.

CNG price in Delhi to rise to Rs 86.98 per kg

Following the hike, the price of CNG in Delhi will increase to Rs 86.98 per kg from Rs 83.09 per kg. The revised CNG price will be applicable in all geographical areas served by the company, IGL said.

The hike comes amid a spike in international prices of liquefied natural gas (LNG) following the escalation of the West Asia crisis.

Delhi CNG prices rise 7.8%

IGL said that Delhi's CNG prices have remained fairly stable despite the Hormuz crisis, during which international gas benchmarks saw a marked increase. Between late February and August 27, the Delhi CNG retail price increased by around 7.8%, from Rs 77.09 to Rs 83.09 per kg.

During the same period, the European gas benchmark (TTF) price increased by around 105%, while the Asian LNG benchmark (JKM) price increased by around 113%.

“Delhi’s CNG consumers (including private cars, auto and taxi, public transport users and others) are largely insulated from the impact of any volatile increase in imported spot LNG prices. In this regard, amongst gas-importing countries like us, Delhi has one of the lowest CNG retail prices in the world,” the IGL release said.

Global LNG prices nearly double amid Hormuz disruptions

Global LNG prices have nearly doubled since July compared with pre-crisis levels due to disruptions in cargo movement through the Strait of Hormuz, IGL said. It added that an increase in demand for natural gas storage in Europe ahead of the winter season has been another factor behind the rise in international prices.

According to IGL, a significant portion of the gas used to meet rising demand in the CNG segment is sourced through imported spot LNG. The increase in international prices has therefore resulted in higher input costs for city gas distributors.

The company said the Rs 3.89 per kg increase was necessary to partially offset the higher input gas cost while maintaining the continuity and reliability of CNG supplies. IGL said it would continue its efforts to optimise sourcing costs.